How To Make Crypto Investment Easier Than Banking
Making a seamless on-ramp to crypto investment for the general public
I recently wrote a piece about the user experience problem prevalent in Blockchain and decentralised applications (DApps) at the moment. DeFi holds so much promise, offering far higher interest rates than traditional savings accounts; but the onramp for these platforms is very technical and requires knowledge that the general public simply doesn’t possess.
If there was a platform that enabled seamless investment without the need for technical know-how, whilst also maintaining the benefits of decentralisation, it would blow up.
Let’s break down the problems stopping that from happening right now.
So Many Moving Parts
FIAT to Crypto
The biggest onramp in this space is Coinbase. After a significant amount of KYC (restrictive), users can purchase several cryptocurrencies with FIAT.
Unfortunately, it’s not decentralised. This means the user doesn’t own the crypto in their Coinbase wallet, Coinbase does. To own your crypto, you need to send to a decentralised wallet. Depending on how much KYC hoops the user has jumped through, approval could take days.
Fine for most non-technical users, but you might as well just use a bank. Not good.
Problem 1: Obtaining crypto without restrictive KYC
The other end of the scale
Let’s say you’ve gone through KYC and finally have your crypto and you want to start using it. You need to send it to a wallet.
Which one do you choose? Metamask is the most popular web3 browser extension. It’s a bit clunky with a steep learning curve. Fine for developers and the tech-savvy, but for the average user it’s pretty scary.
Of course, you have desktop wallets, hardware wallets, lots of solutions with lots of backup phrases, private key management, mnemonic keywords to write down, etc. It’s too much for the average user.
Problem 2: Familiar terminology and easy interface for managing their crypto “investments”
Solutions
Fortunately, significant effort is being put towards solving these two problems.
Problem 1: Obtaining Crypto without restrictive KYC
I recently stumbled on a fantastic onramp, specifically on the Ethereum network, called Ramp.
With several ERC20 tokens supported, Ramp enables anyone to top up their Ethereum wallet using a bank account at any time, without restrictive KYC.
Better yet, DApps can integrate this useful widget with a few lines of code.
AND the fee is only 2.5%, one of the lowest I’ve found anywhere.
Problem 1 solved.
However, it does require you already have an Ethereum address to send the crypto too. This brings us neatly to our second problem.
Problem 2: Familiar terminology and easy interface for managing their crypto “investments”
The everyday investor is not looking to get heavily involved in the technical aspects of owning and using crypto. They want a seamless, easy to use, self-explanatory one-stop-shop. No mention of private keys, mnemonics, etc.
The desired solution needs a website, email and password (or better yet, Facebook/Google) login, and the ability to see balance/redeem/send/invest elsewhere/etc.
Metamask is out of the question. It’s a browser extension for a start, so that’s complicated. And there’s too much nitty-gritty detail like public keys, private keys, choosing networks, etc.
There are a few smart contract wallets out there that make owning crypto simpler than this.
Some notable mentions are those supported by Web3Connect modal, that a lot of DApps are now supporting. Portis, Fortmatic and Authereum are great tools for this.
But my number one for right now is Torus. Why? Because it enables registration and login via Facebook and Google amongst others. Very familiar to the average user.
Unfortunately, their wallet website it a little bit complicated, more geared towards crypto enthusiasts again. However, by integrating into a simpler platform, the complexity can be hidden.
It’s decentralised, so no central authority is in control of private keys. There’s no requirement for private-key management or mnemonic phrases (although it is recommended). AND it’s really easy to integrate into a DApp.
Better yet, it already supports Ramp!
Problem 2 solved.
Bringing it all together
I may be wrong, but I cannot find one solution that pulls these things together for the most seamless crypto purchase and management solution aimed at the everyday investor. Those wanting to use their FIAT to buy crypto without having to worry about ANY of the technical or KYC aspects.
So, that’s what I’m going to do.
I’m going to pull together a proof of concept using these services. Within a few clicks, anyone should be able to register, pay for crypto, receive it, see their balance and manage it. All on one website, no centralised authority, super easy familiar terminology.
Eventually, the website should tie in DeFi protocols to enable users to earn interest. When finished, it should look like any other savings account or investment fund. Sign up with Facebook, send in £200, chose the interest rate you want, and sit back.
Further Reading
If you’re interested in blockchain development, I write tutorials, walkthroughs, hints, and tips on how to get started and build a portfolio.
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